Outsourcing your current in-house law firm accounting team is one of the smartest, most cost-effective actions you can take to give you increased peace of mind. In addition to the cost savings, you can have your pick of law firm experts for your accounting solution and overall business needs. Day-to-day accounting needs will also improve. Let’s dig in.
What Are the Benefits of Outsourced Accounting?
Bring On the Law Firm Business Accounting Experts!
When you outsource your law practice accounting, you can hire an accounting firm whose expertise is the business processes of law firms. Now that cloud-based accounting is the norm, why hire a general accounting professional in your local area when you can hire an accounting department anywhere in the world that deals exclusively with law firms? Their expertise can include:
- knowing which accounting software will best service your law firm.
- providing virtual CFO services.
- tax preparation / CPA services.
- business forecasting / budgeting.
- payroll processing.
- bookkeeping services.
- controller services.
- financial planning.
Karyn Andersen of Total Sum gets hired by law firms because she is a law firm accounting expert. Karyn is more than a commodity as an outsourced law firm accounting expert: she is a trusted advisor. Many of Karyn’s law firm clients are remote. Karyn uses QuickBooks Online cloud based software customized for law firms with LeanLaw, a premier legal app in the QuickBooks app store. She takes care of:
- Accounts Payable / Accounts Receivable.
- Balance Sheet / Financial Statements.
- Trust Accounting / Chart of Accounts.
- Bookkeeping Reconciliations.
- Payroll services.
- Software recommendations.
- Data migration.
- Onboarding to new software.
Value Based Cost Savings
In addition to Karyn’s expertise, the benefit of hiring her accounting team is that the law firm no longer has to deal with coverage when someone in the back office is sick or on vacation. Their desk is covered. Karyn has a large enough staff to create effortless, real-time coverage for the law firm. Law firms no longer have to pay for:
- 401K contributions.
- Vacation Pay.
- Sick Pay.
Karyn states: “…my clients find it’s actually cheaper for them to outsource their accounting to us versus having a full accounting team. They don’t have to pay the additional overhead employer taxes, health insurance, 401k, and having to provide office space for the employees. The majority of the time what they pay us to be a full accounting team is, salary wise, probably going to be much less than if they had their own full in house accounting team.”
Financial Reporting: The difference between cash flow and profitability
One major workflow that Karyn helps her law firm clients with is payments. When payments are setup at the start of a relationship, AR stays low, cash flow remains high and the speed of payment increases. The automation that comes with QuickBooks sets in motion a myriad of possibilities to ease payment options:
- Electronic invoices.
- ACH payments.
- IOLTA trust accounting.
- Credit cards (worth the extra points if you don’t have to chase the payment!).
- Automated reminders.
Outsourced accounting services are a smart solution for law firms looking to lean in on accounting expertise, cost savings and peace of mind.
By: Elizabeth Rogers at LeanLaw